Many of us are familiar with the saying “time is money.” What we’ve been taught is that wasting our time is, in essence, wasting our earning potential. Likewise, many of us have been taught that if we do something ourselves, without paying someone else, we save money. This isn’t always true.
When both of us Debt Free Guys were working, some of our friends wondered why we had a housecleaner if we were money conscious. This is an example of how money equals time, but not ours.
A friend and smart business man taught one of us this concept a while back, but it took a while to put it into action. We would like to explain it for you. We are going to use arbitrary numbers here, but they will get the point across.
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Let’s say each of us earns $25 an hour. Combined, we’re making $50 an hour. Let’s, also, say it takes the two of us 2 hours total to clean our condo. That’s roughly $100 of our time. If we find someone who cleans our condo for less than $100, we’re ahead. We did exactly that.
In the case of our business friend, he billed clients $150 an hour. He swapped an 1 hour of his time to pay someone else to clean his house.
But, you ask, “Why do you two cook your own meals?” We cook our own meals because the same concept applies. Where can we find prepared, high quality, healthy food that’s also cheap? Nowhere. Most low cost food is high in fat and salt. Preparing our own food is something we can do quickly. We often cook multiple meals at a time, saving us time in the long run and cutting the overall cost even more. In this case, our ability to bill our employer for hours worked is less than what it costs to pay for high quality food. So, we cook our own meals.
There are two questions to ask when applying this concept:
- Do I earn enough to offset the spending that will be used by someone else’s time? In other words, can you truly afford it? Some people, even though they have the earning potential to offset the cost, still can’t do this because other expenses are too high.
- Will you? In other words, will you work the hours to cover the expense or will it become just another monthly expense?
Time is money, but you will have neither time nor money if you waste them.